Week 4- Measuring nation's income problem set Flashcards Preview

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Flashcards in Week 4- Measuring nation's income problem set Deck (21):
1

Inflation: When economy's overall price is____

Rising.

2

Inclusion in the investment component of GDP: Spending on___

New business equipment such as power tools but not spending on stocks and bonds.

3

Real GDP includes___

yearly production of final goods valued at constant prices.

4

Recession occurs when___

real GDP declines for 2 consecutive quarters.

5

Transfer payment is a form of___

gov’t spending that is not made in exchange for a currently produced goods.

6

Department of Commerce computes US GDP___

every 3 months.

7

GNP____

GDP + income earned by US citizens abroad – income that foreign citizens earned in US.

8

GDP includes___

o Value of all goods produced w/I a country
o Including foreigners working in US; excluding production by US residents by foreign countries.
o Used to monitor performance of overall economy

9

In 2009, consumption

represented 70% of GDP.

10

Nominal GDP values production at___

current prices.

11

Real GDP values production at___

constant prices.

12

Gov’t purchases include spending on goods by___

federal, state, and local gov’t.

13

In a Simple circular flow diagram, firms use money they get from sale to___

pay workers, rent, and firm owners.

14

Basic tool of supply and demand are___

central to macroeconomics analysis as well as microeconomic analysis.

15

When studying changes in economy over time, economists want to study___

real GDP.

16

In Simple Circular flow diagram, household buy goods w/ income they get from___

wages, rents, and profits.

17

National income measures the total income of____

a nation’s permanent residents in production of goods.

18

Inflation rate measures the____

% change in price level from 1 period to another.

19

Depreciation is the____

consumption of fixed capital.

20

Change in GDP deflator reflects___

only changes in prices.

21

GDP per person tells us income and expenditure of___

average person in the economy.